Po Valley Energy
All of the Po Valley Energy's fields are in very close proximity to the pipeline grid and major consumers in the north of Italy
Po Valley snares gas offtake and shares jump 22%
Po Valley Energy (ASX:PVE) has announced a landmark first gas offtake agreement with Italtrading Spa from the company's northern Italy gas fields with a contract sales revenue of $A77.5 million (Euro38 million).
The agreement represents first sales revenue for part of planned production from the Sillaro and Castello gas fields in Italy. Further agreements to cover the balance of production for the first three years from the Sillaro and Castello fields are expected to be announced in early 2009, the company said.
ITaltrading SpA is an established gas and energy company, part of the the larger AFIN Group, a private company with global turnover of Euro500 million in 2007.
Further gas fields will be brought into production progressively by Po Valley in mid-2009.
Po Valley CEO, Michael Masterman said, "bidding for the output from these two fields was intense, with 11 bidders negotatiating for the supply contract." The strong interest co-incided with greater uncertainty in the Western European gas supply markets as Russia closed off gas supply to the Ukraine.
Offtake terms were based on the ENI Gas Release price formula with the current price equating to $US14 per one thousand cubic feet of gas.
Castello has proved and probable (2P) gas reserves of 6.3 billion cubic feet (bcf) and is expected to have an initial production rate of 2.7 million cubic feet a day starting in June/July 2009. Sillaro has 2p gas reserves of 14 bcf, with an expected initial production rate of 3.8 mcfpd, starting in September/October 2009.
Comment
With likely further gas offtake agreements in early to mid-2009, Po Valley shares are likely to resume an uptrend that mirrors development companies that become producers. With a tight share capital and in one of the strongest gas markets (in terms of gas prices and demand), PVE looks to be ideally placed in 2009.
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Other Po Valley Energy articles
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22/06/09 Po Valley Energy clears final Italian regulatory approval for gas production plant
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01/05/09 Po Valley Energy inches closer to gas production in Italy
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21/04/09 Po Valley Energy has strong gas flow rates at Bezzecca #1 well, Italy
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15/04/09 Po Valley Energy has gas flows at fourth gas field at Bezzeca-1, Italy
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13/03/09 High hopes for Po Valley's fourth Italian gas field, potentially five times larger than Castello
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23/02/09 Po Valley raises $10 million in share placement
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30/01/09 Significant milestones achieved by Po Valley at Sillaro and Castello fields
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29/01/09 Po Valley gains Italian Government approvals for expanded gas exploration in Italy
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27/11/08 Po Valley gains production concession approval Sillaro, Italy
Other Po Valley Energy news
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02/07/09 Po Valley Energy moves step closer to gas production at Castello in Italy
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31/03/09 Po Valley finds gas, to test Bezzeca #1 well in Italy
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26/02/09 Po Valley Energy secures 2nd gas offtake deal in Italy, taking initial sales to A$150 mln
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17/02/09 Proactiveinvestors audio interview with Michael Masterman of Po Valley Energy
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09/12/08 Po Valley's Sillaro gas pipeline connected to Italian grid
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10/11/08 Po Valley receives Italian Government Gas Production Concession
